! Required information Problem 6-5A (Algo) Preparing a bank reconciliation and recording adjustments LO P3 (The following information applies to the questions displayed below.) Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,087 and No. 5893 for $485. Check No. 5893 was still outstanding as of September 30. The following information is available for its September 30 reconciliation. From the September 30 Bank Statement PREVIOUS BALANCE 20,000 TOTAL CHECKS AND DEBITS 9,859 TOTAL DEPOSITS AND CREDITS 11,794 CURRENT BALANCE 21,935 CHECKS AND DEBITS Date No. Amount 09/03 5888 1,087 09/04 5902 715 09/07 5901 1,805 09/17 672 NSF 09/20 5905 935 09/22 5903 449 09/22 5904 2,116 09/28 5907 217 09/29 5909 1,863 DEPOSITS AND CREDITS Date Amount 09/05 1,191 09/12 2,270 09/21 4,378 09/25 2,350 09/30 15 IN 09/30 1,590 CM From Chavez Company's Accounting Records Cash Receipts Deposited Cash Date Debit Sept. 5 1,191 12 2,270 21 4,378 25 2,350 30 1,660 11,849 Cash Payments Cash Check No. Credit 5901 1,805 5902 715 5903 449 5904 2,073 5905 935 5906 1,049 217 5908 414 5909 1,863 9,520 5907 PR Debit Cash Date Explanation Aug. 31 Balance Sept. 30 Total receipts 30 Total payments Acct. No. 101 Credit Balance 18,428 30,277 20,757 R12 D23 11,849 9,520 Additional Information (a) Check No. 5904 is correctly drawn for $2,116 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,073. (b) The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. (c) The credit memorandum (CM) is from the collection of a $1,590 note for Chavez Company by the bank. The collection is not yet recorded. Problem 6-5A (Algo) Part 1 Required: 1. Prepare the September 30 bank reconciliation for this company. CHAVEZ COMPANY Bank Reconciliation September 30 Book balance Add: Bank statement balance Add: Deduct: Deduct: Adjusted bank balance Adjusted book balance Required information PR Debit Credit Balance Date Explanation Aug. 31 Balance Sept. 30 Total receipts 30 Total payments R12 D23 11,849 18,428 30,277 20,757 9,520 Additional Information (a) Check No. 5904 is correctly drawn for $2,116 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,073. (b) The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. (c) The credit memorandum (CM) is from the collection of a $1,590 note for Chavez Company by the bank. The collection is not yet recorded. Problem 6-5A (Algo) Part 2 2. Prepare journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry related to the September 30 deposit, if required. Note: Enter debits before credits. Date General Journal Debit Credit Sept 30 Record entry Clear entry View general journal Record the entry related to the September 30 deposit, if required. 2 Record the entry related to interest earned, if required. 3 Record the entry related to the note receivable and the collection, if required. 4 Record the entry related to the outstanding checks, if required. Record the entry related to the NSF check, if required. Record the entry related to the error on check 5904, if required